Money laundering is the process of dealing with the proceeds of predicate offences. FATF requires countries to apply the money laundering offence to the widest range of predicate offences, and the list is defined by each country's law, which can include crimes committed abroad.
Example
Funds from a bribery scheme are the proceeds of a predicate offence (corruption); disguising them is the money laundering offence.
Where it appears in the exams
This topic is relevant for CAMS, CFCS, CFE.
Related terms
- Placement: Placement is the first stage of money laundering, in which criminal cash or other proceeds are put into the financial system or converted into other assets.
- Layering: Layering is the second stage of money laundering: moving funds through many transactions, accounts, companies or countries to hide where they came from.
Source: FATF Recommendation 3. Independent explanation for study purposes, not legal advice.